Daily Management Review

Cryptocurrency Venture Capital Financing Has Reached $2.4 Billion, According To Pitchbook


Cryptocurrency Venture Capital Financing Has Reached $2.4 Billion, According To Pitchbook
According to Pitchbook statistics, investment in cryptocurrency startups increased for a second consecutive quarter to $2.4 billion in the first three months of 2024 as investor hunger was piqued by the prospect of lower interest rates and the launch of the first bitcoin spot ETF in the United States.
According to analytics firm PitchBook, funding increased by 40.3% from the previous quarter and was allocated across 518 acquisitions. During the same era, venture capital investments globally fell to a level almost five years below.
Since the high of almost $10 billion in the first quarter of 2022, investor investments on startups focused on digital assets have also declined, hampered by concerns about the economy and the closure of major participants in the industry.
But the historic regulatory approval of spot bitcoin ETFs by U.S. authorities, which are provided by major players like Fidelity and BlackRock, enhanced the credibility of the asset class and contributed to bitcoin's surge to a record high of $73,803 in March.
Pitchbook analyst Robert Le said that "the recovery in publicly traded tokens and continued rise in institutional adoption will drive increased VC funding."
According to PitchBook, the majority of financing for startups during the quarter went to those concentrating on developing infrastructure for cryptocurrency and blockchain technologies.
Decentralised cloud platform Together AI closed the biggest transaction, raising $106 million in an early stage funding round headed by Salesforce Ventures and valued at $1.1 billion.
"The investment rounds have become highly competitive, especially at the early stages," Pitchbook's Le added.
"This is compounded by the fact that early-stage deals are earning higher valuations than late-stage deals but.. we will see if this trend holds in the coming quarters."
However, there were still few exits. Le anticipates that as the industry develops, merger activity will increase later in the year, especially among custodians, infrastructure providers, and cryptocurrency exchanges.